Staying put

AES weighed many factors in deciding to remain in Arlington

February 28, 2014

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Print this pageby Joan TupponceAES Corp. has made the Ballston area of Arlington its home since 2003. Photo by Mark Rhodes

The Arlington Economic Development team was thrilled last year when global energy company AES decided to keep its headquarters in the county. The company has more than 300 employees in a 100,000-square-foot space in the heart of Arlington’s Ballston area. AES, founded in Rosslyn im 1981, has been a member of the Arlington community for more than 20 years. The Fortune 200 company has offices in 20 countries and 25,000 employees worldwide.

AES felt good about the move it made from Rosslyn to Ballston in 2003. “There was more space and it was less expensive and near the Metro, but at the time it was out in the boondocks,” says company CEO Andrés Gluski.

The company likes the way the area has developed during the past few years with more restaurants and retail joining the mix. Even so, it still had to consider economics when it began thinking about its contract renewal. “All companies are under a lot of cost pressure, especially in the utility industry,” Gluski says. “We have to make sure every dollar we spend is efficient.”

It made sense for AES to look at other offers from competing localities that were offering the company a great deal of space as well as attractive rents. Because AES liked the Ballston area, the company had to see if it “could justify staying” in Ballston, Gluski says. “Our alternative was moving to the Dulles area.”

The economic development department began talking with the company about two years ago when other Northern Virginia localities began trying to lure AES away from the county. “There was a lot of pressure from neighboring communities for AES to move,” says Jennifer Ives, the county’s director of innovation and strategic partnerships. “We worked with AES about any concerns they might have.”

Rent was a major factor and AES was hoping to negotiate a figure that would keep the company in Ballston. To help with the process, the company hired the Chicago-based real estate firm, Jones Lang LaSalle. “They did a great job of helping us look at this area and out in Dulles,” says AES’ chief information officer, Elizabeth Hackenson. “They helped us negotiate a favorable lease with the building owner, Prudential, and we signed an 11-year contract last year.”

The contract negotiation included remodeling AES’ current space. Originally, the company occupied five floors. In recent years, it built an internal stairway connecting three of the floors. The deal involves the remodeling of the company’s current space, creating a more open, collaborative workspace on the three connected floors. “We are in that stage now,” says Hackenson of the remodeling. “By the end of August we will be in our new space.”

Retaining the headquarters of the Fortune 500 company was crucial to the county. Not only is it a member of the business community, but it is also a leader in the global energy sector. “It was important for AES to continue to help anchor the innovation-economy business community within Arlington,” Ives says.

Arlington economic development officials have a longstanding relationship with executives at AES, a factor that contributed to the company’s decision to stay. “We have been actively assisting with the needs of the company,” Ives says. “We are always seeing how the community could be of support.”

Economic development staff, for example, met with company executives during lease negotiations to see how the county could help and address any potential concerns. One of the company’s requests was to add larger signage to the top of its headquarters for better visibility. “We were able to do that,” Ives says, noting there were no incentives offered to the company during negotiations.

The benefits of being based in Arlington helped make the company’s decision easier. AES’ headquarters is just a block away from Interstate 66, offering easy access to Washington Dulles International Airport, and a block from the Metro with access to embassies and potential clients in Washington, D.C. It also is close to Ronald Reagan National Airport. “It’s about a global company looking for that connectivity,” Ives says. “They felt very comfortable in Arlington.”

The company’s location offered access as well to a young, well-educated workforce. “Live, work and play isn’t just a phrase anymore that economic development officials can use,” says Ives. “Now companies are truly looking for an area where you can live, work and enjoy yourself within the same community and have everything within a few blocks.”

At the end of the day AES wanted to be in Arlington because of its workforce, accessibility and business-friendly community. “We have been very happy with the end result,” Gluski says.